Facts
B., a resident of Turkey (client, respondent), held an account with A. SA (bank, appellant) headquartered in Geneva. The bank's client advisor presented the client with self-created asset overviews that partially did not correspond to the bank's official account statements. The Commercial Court of the Canton of Zurich estimated the damages incurred by the client due to unauthorized or unapproved transactions in accordance with Art. 42 para. 2 of the Swiss Code of Obligations (OR) based on reference values and ordered the bank to pay the client USD 5,670,090.
The Federal Supreme Court upheld the bank's appeal, set aside the judgment of the Commercial Court, and dismissed the claim.
Considerations
The Federal Supreme Court stated that for the execution of stock exchange transactions or investment activities, three different contractual relationships are generally considered: the mere account/custody relationship, investment advice, and actual asset management. In the present case, the contract between the parties was classified as investment advice.
In the case of investment advice, the client makes the investment decisions themselves, but the bank provides advisory support. If only individual investments were made in violation of the contract, the calculation of damages is limited to determining the difference between the actual value of…